total reward statements: maximising your investment … · total reward statements: maximising your...
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© 2005 The Hay Group Management Limited. All Rights Reserved
Simon [email protected] Tel: 020 7856 7349
Total Reward Statements:Maximising your investment in reward
© 2005 The Hay Group Management Limited. All Rights Reserved
2 Total Reward Statements
What are they?
Why do organisations issue them?
In what situations?
Typical implementation process
Critical success factors
Statement contents & examples
Summary
© 2005 The Hay Group Management Limited. All Rights Reserved
3Total Reward StatementsWhat are they?
© 2005 The Hay Group Management Limited. All Rights Reserved
4Total Reward StatementsWhat are they?
A total reward statement is a personalised statement of the tangible remuneration and benefits offered by the employer. It will usually detail the value of the major cash and non-cash benefits, and may include illustrative graphs or charts
Can be used to communicate wider reward messages and less tangible benefits such as flexible working, training & development, etc
Effective in developing or reinforcing a branding for reward and benefits within an organisation
Paper based or on-line
© 2005 The Hay Group Management Limited. All Rights Reserved
5Total Reward StatementsWhy do organisations issue them?
A total reward statement can help organisations maximise the return on their reward investment by ensuring that employees understand all the components within their package, together with the value of them.
Typical spend on the benefit elements of the reward package accounts for 20%-30% of salary expenditure. A recent survey showed that 78% of employees estimated the cost of benefits as less than 10% of salary. Total reward statements will help increase the perceived value of the package on offer.
A statement makes employees aware of the total value of their reward package and so may discourage them from moving elsewhere for a small increase in basic salary.
Stepping up benefits communication effort is a relatively inexpensive exercise when compared to the cost of providing the benefits themselves or direct and indirect costs of staff turnover.
Sends a positive message to staff: “We care about you”.
© 2005 The Hay Group Management Limited. All Rights Reserved
6
“I’ve never seen employee communications be so professional” – Executive Committee member on receiving total reward statement
“Increased the level of benefit awareness amongst employees, increasing take up of some benefits and saving employees money” – HR Director, following issue of statements
“In tandem with other exercises they really energised our employees around flexible benefits, we’ve never seen a take up rate so high for one of our briefing sessions!” – Personnel Director, commenting on statements used as part of flexible benefits launch
“Total reward statements helped improve the results around reward in our employee survey” – Head of Reward
Total Reward StatementsWhy do organisations issue them?
© 2005 The Hay Group Management Limited. All Rights Reserved
7Total Reward StatementsIn what situations?
Appropriate for almost all organisations wanting to enhance perceived value of reward packages.
In particular those with:– Range of non-cash benefits (e.g. pension)
– Range of less tangible benefits (e.g. flexible working)
– Voluntary / Salary sacrifice (e.g. Childcare vouchers)
– Share schemes (e.g. SAYE)
Or:– Introducing flexible benefits
– Undergoing changes to package
© 2005 The Hay Group Management Limited. All Rights Reserved
8Total Reward StatementsTypical implementation process
Typically two to three monthsConsider pilot
ProjectPlanning
Understanding of objectives
Auditcurrent policies
Draft statement
design
Determine valuation
methodology
Audit data availability
Data collection and validation
Build databases
and programme calculations
Produce and
distribute statements
Wider communication and engagement
© 2005 The Hay Group Management Limited. All Rights Reserved
9Total Reward StatementsCritical success factors
High quality, accurate employee data
Robust, defensible valuation methodology
Clear simple communication style consistent with employer’s brand
Personalisation
Communication strategy
© 2005 The Hay Group Management Limited. All Rights Reserved
10Critical success factor:Data quality
Data availability
Consistent benefit policies
Anomalies
Multiple sources (pension, cars, share schemes, etc)
© 2005 The Hay Group Management Limited. All Rights Reserved
11Critical success factor:Valuation methodologies
Meet organisation’s requirementsFair and comprehensible to employeesConsistent with any other previous communicationsFuture proof
Issues to consider include:– Whose cost?– Defined benefit pension schemes– Share schemes– Holidays– Amount of personalisation– Policy value vs personal entitlement– Benefits not taken up
© 2005 The Hay Group Management Limited. All Rights Reserved
12Total Reward StatementsTypical statement contents & examples
Covering letter
Personal details
Summary charts and/or tables
Fuller breakdown and description of benefits
Other non-tangible benefits
Voluntary benefits
© 2005 The Hay Group Management Limited. All Rights Reserved
13Total Reward StatementsTypical statement contents & examples
personaldata
letterfrom CEO
branding
piechart
summarydata
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14Total Reward StatementsTypical statement contents & examples
More detailon key benefits
branding
Detail onother benefits
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15Total Reward StatementsTypical statement contents & examples
keybenefits
brandingWelcome screen
& introduction
glossary& FAQs
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16Total Reward StatementsTypical statement contents & examples
Detaileddata
Plan details Links to
moreinformation
© 2005 The Hay Group Management Limited. All Rights Reserved
17Total Reward StatementsSummary
Do:– Ensure accurate, available data– Value benefits using a fair, robust methodology, capable
of explanation to employees– Have a clear, branded design– Personalise as far as possible– Include non-tangible benefits
Don’t:– Cut corners– Oversell benefits– Just publish numbers– Stop!
© 2005 The Hay Group Management Limited. All Rights Reserved
Total Reward Statements:Maximising your investment in rewardSimon [email protected] Tel: 020 7856 7349